Director, Office of Workers' Compensation Programs, U.S. Dept. of Labor v. Campbell Industries, Inc.

• Decision Date: 04 June 1982
• Docket Number: No. 81-7243,81-7243
• Citation: 678 F.2d 836
• Parties: DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, Petitioner, v. CAMPBELL INDUSTRIES, INC., Respondent.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 836

678 F.2d 836

DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED

STATES DEPARTMENT OF LABOR, Petitioner, v. CAMPBELL INDUSTRIES, INC., Respondent.

No. 81-7243.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 11, 1982.

Decided June 4, 1982.

Marianne D. Smith, Washington, D. C., for petitioner.

William H. Taylor, Taylor, Jones & Wilson, San Diego, Cal., for respondent.

Appeal from a Decision of the Benefits Review Board.

Before GOODWIN, SNEED and ANDERSON, Circuit Judges.

GOODWIN, Circuit Judge.

The Director, Office of Workers' Compensation Programs petitions for review of a Benefits Review Board decision which affirmed the administrative law judge's findings that the employee-claimant was totally disabled and entitled to benefits but reversed the administrative law judge's finding that Campbell Industries was not entitled to relief under § 8(f) of the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. § 908(f).

The issues on review are: (1) whether the Board exceeded its scope of review of the administrative law judge's decision and (2) whether the employer met the requirements for relief under § 8(f).

The claimant was a general laborer for Campbell. From 1971 through 1973, claimant sustained five injuries on the job. The first four accidents did not result in any residual medical problems and did not result in eligibility for benefits under the Act. Three claims were time-barred under § 13(a) of the Act, 33 U.S.C. § 913(a). The fourth claim was denied because the claimant was not off work for the required period of time. 33 U.S.C. § 906(a).

The fifth injury occurred on September 16, 1973 when claimant injured his lower back shoveling sand. He received treatment and remained off work for six weeks. He attempted to return to work twice in November, 1973, but was unable to perform his regular duties. He has not worked since 1973. Claimant has received continual orthopedic treatment for his back and psychiatric treatment for severe emotional problems. Just before the hearings in June, 1979, claimant attempted suicide.

The administrative law judge found that the claimant was permanently and totally disabled as a result of the injury of September 16, 1973, and also found that the employer was not entitled to relief under § 8(f) of the Act.

Campbell appealed this decision to the Board. The Board affirmed the administrative law judge's finding of permanent total disability but reversed the administrative law judge's finding that Campbell was not entitled to relief under § 8(f).

The Director of the Office of Workers' Compensation Program appeals the reversal of the administrative law judge on the § 8(f) claim.

A. STANDARD OF REVIEW

Under § 21 of the Act, 33 U.S.C. § 921, the court of appeals must scrutinize Board decisions for "errors of law and for adherence to the statutory standard governing the Board's review of the administrative law judge's factual determinations." Bumble Bee Seafoods v. Director, Office of Wkrs.', 629 F.2d 1327, 1329 (9th Cir. 1980). Some cases do not distinguish the functions of the Board and the administrative law judge. Sometimes the Board rather than the administrative law judge is described as the fact-finder. Duncanson-Harrelson Co. v. Director, etc., 644 F.2d 827, 830 (9th Cir. 1981), National Steel & Shipbuilding Co. v. Bonner, 600 F.2d 1288, 1291 (9th Cir. 1979); Cordero v. Triple A Mach. Shop, 580 F.2d 1331, 1333 (9th Cir. 1978), cert. denied, 440 U.S. 911, 99 S.Ct. 1223, 59 L.Ed.2d 459 (1979).

"That holding places in focus the difference in functions between the Benefits Review Board and other administrative agencies. Unlike boards which can, on the record developed before an Administrative Law Judge, make independent factual determinations, the Benefits Review Board is restricted to substantial evidence review." 33 U.S.C. § 921(b)(3). Atlantic & Gulf Stevedores v. Director, Etc., 542 F.2d 602, 608 (3rd Cir. 1976). (Footnote Omitted).

Accord: Bumble Bee Seafoods v. Director, Office of Wkrs.', 629 F.2d 1327, 1329 (9th Cir. 1980).

The Board must accept the administrative law judge's findings unless they are contrary to the law, Cardillo v. Liberty Mutual Co., 330 U.S. 469, 477-78, 67 S.Ct. 801, 806, 91 L.Ed. 1028 (1947), irrational, O'Keeffe v. Smith Associates, 380 U.S. 359, 362, 85 S.Ct. 1012, 1014, 13 L.Ed.2d 895 (1965), or unsupported by substantial evidence in the record. O'Leary v. Brown-Pacific Maxon, 340 U.S. 504, 508, 71 S.Ct. 470, 472, 95 L.Ed. 483 (1951); Bumble Bee Seafood v. Director, Office of Wkrs.', 629 F.2d at 1329; Army & Air Force Exchange Service v. Greenwood, 585 F.2d 791 (5th Cir. 1978); Presley v. Tinsley Maintenance Service, 529 F.2d 433, 436 (5th Cir. 1976). If the Board departs from this standard, the court must reverse. Bumble Bee Seafood v. Director, Office of Wkrs.', 629 F.2d at 1329; Atlantic & Gulf Stevedores v. Director, etc., 542 F.2d at 608.

The Director argues that the Board exceeded its statutory scope of review in overturning the administrative law judge's finding that Campbell was not entitled to relief under § 8(f). The medical evidence in this case could support more than one result.

Upon such a record, the Board should defer to the administrative law judge's findings on all fact questions unless the findings are not supported by substantial evidence. The Board is not at liberty to reweigh the evidence and substitute its own view. 33 U.S.C. § 921(b)(3). ¹ Questions of law are another matter.

B. LIMITATION OF LIABILITY UNDER § 8(f)

§ 8(f) provides in pertinent part:

"... In all other cases in which the employee has a permanent partial disability, found not to be due solely to that injury, and such disability is materially and substantially greater than that which would have resulted from the subsequent injury alone, the employer shall provide ... compensation for one hundred and four weeks only. (2) After cessation of the payments ... the employee ... shall be paid the remainder of the compensation that would be due out of the special fund established in section 944 of the title." 33 U.S.C. § 908(f).

In order to obtain relief under § 8(f), the employer must show (1) that the claimant had an existing permanent partial disability prior to the last injury; (2) that the disability was manifest to the employer, and (3) that the current disability is not due solely to the most recent injury. Dillingham Corporation v. Massey, 505 F.2d 1126, 1128 (9th Cir. 1974). Accord: Duncanson-Harrelson Co. v. Director, Etc., 644 F.2d at 833.

The legislative history indicates that:

"... the purpose of new § 8(f) is to prevent discrimination against handicapped workers in hiring and firing, a discrimination encouraged by the remainder of the Act were it not for § 8(f). The Act makes the employer liable for compensation. Hence, the employer risks increased liability when he hires or retains a partially disabled worker. By virtue of the contribution of the previous partial disability, such a worker injured on the job may suffer a resulting disability greater than a healthy worker would have suffered. Were it not for the shifting of this increased compensation liability from the employer to the Special Fund under § 8(f), the Act would discourage employers from hiring and retaining disabled workers." C & P Tel. Co. v. Dir. Office of Wkrs.' Comp. Prog., 564 F.2d 503, 512 (D.C.Cir., 1977).

The administrative law judge found that Campbell was not entitled to relief under § 8(f) because: (1) claimant had no existing permanent partial disability prior to the injury of September 16, 1973; (2) whatever disability claimant had was not manifest to Campbell; and (3) claimant's current disability was due solely to the injury of September 16, 1973.

The Board reversed the administrative law judge's finding because: (1) Section 8(f) does not require that a preexisting condition be economically disabling (law); (2) claimant suffered from lumbar scoliosis and degenerative disc disease as a result of previous injuries (fact); and (3) claimant's permanent partial disabilities were manifest to his employer, because they were mentioned in his medical records which the employer had (fact).

The Director argues that the Board erred in granting Campbell relief under the second injury provision of § 8(f) because (1) the claimant did not have a permanent partial disability (fact); (2) the claimant's condition was not manifest to Campbell (fact); and (3) claimant's total disability was due solely to the injury of September 16, 1973 (fact).

1. Permanent Partial Disability

The most accepted definition of disability in § 8(f) is set forth in C & P Tel. Co. v. Dir., Office of Wkrs.' Comp. Prog., 564 F.2d 503, 513 (D.C.Cir.1977):

"... To summarize, the term 'disability' in new § 8(f) can be an economic disability under § 8(c)(21) or one of the scheduled losses specified in § 8(c) (1)-(20), but it is not limited to those cases alone. 'Disability' under new § 8(f) is necessarily of sufficient breadth to encompass those cases, like that before us, wherein the employee had such a serious physical disability in fact that a cautious employer would have been motivated to discharge the handicapped employee because of a greatly increased risk of employment-related accident and compensation liability." (Emphasis Added).

Although the administrative law judge applied an economic disability standard, his finding should be upheld because the employer did not meet the more liberal test applied in C & P Telephone, 564 F.2d at 513. The claimant did not have a manifest, physically disabling condition serious enough to motivate a cautious employer to discharge him rather than incur the possibility of increased liability. This was a finding of fact. Although the claimant had three previous back injuries, he returned to work within days, with no work restrictions, and without additional medical problems or medical care. Furthermore,...